FHA Closing Cost Question

[Anonymous]

Well, after many months of rebuilding credit and tackling debt, we finally got our conditional approval for an FHA loan on a brand new construction!  To say we are all thrilled is an understatement.  We're looking to close in about ~40 days and I have some questions about closing costs.  This is a standard FHA loan but I need some help understanding the costs.  It looks to me like the Upfront Mortgage Premium is included in the loan(which is fine), but on the last page it shows that $4,900 as part of the closing costs and factoring into the cash to close.  With my limited understanding,shouldn't that $4,900 be deducted from the closing costs since it's getting rolled into the loan?  There's a whole lot of numbers here and I'm having trouble making sense of it.  Thanks in advance!

[NC_Mtg_Loaner]

It appears correct but if you are confused it's recommended you discuss this with your loan officer. 

Your base minimum loan amount is 96.5% of the purchase price plus the 1.75% of UFMIP and they all appear to be calculated correctly.  Of course that seems to be a rather high rate for that loan amount in this day and age, but dealing with builders' lenders can be complicated as they make it difficult to shop around.   (did you shop around at all?)

[Mortgage-Specialist]

I can't unsee that interest rate they're giving you and its very concerning. That can't be.. Do you mind telling us your credit scores?

[Anonymous]

Sure. Mid score is 600. Took a lot to even get to that point. They're offering $6,000 in incentives to use their lender so we really can't shop around. 

[Mortgage-Specialist]

I'm glad you're getting something out of it

[NC_Mtg_Loaner]

well, if you don't shop around now ( 1% lower in rate would save $150/mo or $1800 / year) I'd certainly be ready to conduct an FHA Streamline REfi as soon as you've made your 7th payment.